'Buy-to-leave' investors face big fines over empty homes in Islington

A London town hall is threatening to impose huge fines on “buy-to-leave” investors who snap up properties but then let them stand empty for years.

Islington is the first local authority in the capital to propose such aggressive measures against those owning the growing number of “ghost apartments” — usually foreign buyers.

The rule will require anyone who buys a home in the borough to prove it is regularly occupied. If they cannot, they will face a “significant fine” that could be as much as £60,000, with “enforcement action” if they fail to pay.

Councillors say they have seen many new developments marketed in the Middle East and Far East. The trend is particularly pronounced in the City Road area, where they claim no one is on the electoral roll in as many as half of homes in some recent schemes.

Last year, officials discovered that 11 overseas owners of flats in the Bezier block, on Old Street roundabout, were renting them on “short-term” holiday lets at £200 a night in breach of planning rules. Islington will make it a condition of planning permission that all new flats are lived in permanently.

James Murray, the council’s executive member for housing, said: “In Islington, as across London, it’s harder and harder for people to find somewhere they can afford to live. At the same time, expensive new housing is being built, often sold off-plan overseas, and then left to stand empty.

“It’s galling for Londoners, and outrageous in the middle of a housing crisis. We desperately need more affordable housing. We cannot stand by as homes sit there empty as investments.”

The fines would be imposed for a breach of a planning conditions, under existing planning law. The number of days that an owner or tenant would need to occupy the home to avoid the penalty has not yet been decided. But Mr Murray said it would be “more than one weekend shopping trip a year”.

Last month the Standard exposed the scandal of 700 empty London homes used “as real life Monopoly pieces”. The Bishops Avenue in Hampstead has 15 houses, worth £350 million, that have been left to rot — in some cases for decades. Mayor Boris Johnson has urged boroughs to impose punitive council tax rates on empty homes.

An Islington council consultation document on the rule change states: “The price of London property when buying in other currencies has come down, making it more attainable for the upper-middle class in the Far East, among others. In some locations, such as Hong Kong, London represents better value than domestic property.” The consultation runs until April 14.